Fairness realized with Observer

We examine the interference of fairness and observers in digital coin systems. Since copying of coins cannot be prevented cryptographically in anonymous off-line coin systems, double-spending detection is one of the major tasks. An observer is a tamper resistant device that prevents doublespending physically, i.e., Alice has no access to her coins and therefore she cannot copy them. Digital coin systems usually guarantee perfect anonymity. The bank cannot link views of the withdrawal and payments in order to determine wether or not a customer spents his money at a certain shop. Anonymity is one of the essentials of digital coins. The customer’s privacy protection is the main difference of coin systems from credit card or cheque based systems. While privacy protection is a desirable property of cash systems, perfect anonymity is not. Perfect anonymity enables criminals to do perfect blackmailing or money laundry, [vSN92]. To prevent a perfect crime it has to be possible to revoke the anonymity of customers in case of need. Anonymity revocation is done by a trusted third party. Cash systems that allow anonymity revocation are called fair. We present a coin system which features both observer and fairness. This shows that both concepts do not interfere and can be implemented simultanously without loss of security. Unlike other fair off-line coin systems, fairness is realized with the help of the observer, which decreases the computational effort during the withdrawal.